The German Money Behind the Heron Gate Evictions

How financialization is being used to force out an entire neighbourhood

By Josh Hawley

In the Heron Gate neighbourhood of south Ottawa, tools from the world of finance and a flow of European capital are being used to fuel the largest mass urban displacement in Canada.

A small number of corporate executives, from companies that are intertwined behind the scenes have strategically neglected the property, ignored resident demands and city maintenance bylaws, deployed intimidation tactics, and “demo-victed” the most diverse neighbourhood in the city.

Over 500 people, including hundreds of children, received eviction notices from their landlord, Timbercreek Asset Management, in May 2018.

Heron Gate residents are not so lucky. In their case, the injection of foreign capital and influence has been coupled with the will of local politicians to disperse working class tenants.

Only two years ago, the first phase of Timbercreek’s seven-to-ten year redevelopment plan for their entire “Heron Gate rental community” forced around 300 tenants from their row townhouses, which were soon demolished to make way for “resort-style” apartments.

The City of Ottawa’s land parcel division for Heron Gate and correlating owners, 2007 to 2012-2013 Graphic: Josh Hawley

The vast majority of tenants (89 per cent) who are currently facing displacement are people of colour, with 44 per cent of the families being first generation Somali immigrants. Heron Gate is already the neighbourhood with the highest level of housing insecurity in Ottawa, with their homes in need of major repair after years of purposeful neglect on the part of landlords, past and present. Many of the families affected are large, with an average of 5.4 people per house. Most have low incomes, yet they pay market rent – which is around $1,400 or $1,500 for a three or four bedroom townhouse.

Timbercreek’s evictions represent deep structural racism and classism, as the wholesale eviction of Heron Gate has been left unchallenged by all levels of government, social service agencies and charities. Through the Herongate Tenant Coalition, the class struggle has been led entirely by tenants coming together from the broader Heron Gate neighbourhood to resist gentrification and demand the right to stay in their homes.

From day one, the Heron Gate properties were conceived as a monopoly. Prior to Timbercreek, a company called Transglobe owned the entire neighbourhood. Prior to Transglobe it was Minto, which developed it as a planned community.

This is still a significant simplification, since the ownership of the property seems subject to endless obfuscation.

The Heron Gate residential properties were publicly branded entirely as Transglobe from 2007 to around August 2012, except for a few late interventions by affiliated companies Blue Ridge Realty Management and Starlight. These two companies appeared on some outdoor signs for a short period of time at the same time other signs remained Transglobe, creating the impression among tenants that their homes were being passed through multiple owners.

In late summer of 2012, stability came, people were told, when Timbercreek placed their stickers over all mentions of Transglobe, leaving only the original grid-lined globe logo on the large signs as a faded stain of a notorious slumlord.

Timbercreek stickers placed over previousmentions of Transglobe, whileTransglobe’s grid-lined globe logoremains as a watermark on the sign.Photo: Josh Hawley

When challenged on the area’s poor upkeep, Greg Rogers, senior vice president of development for Timbercreek, said in February 2018 at the Timbercreek-led “visioning session” for Heron Gate, “We’re a lot better than the last owner.”

It turns out the past and present owners of Heron Gate are not so easily separated.

Behind all of these companies lies a serpentine ownership network of corporations, partnerships and trusts, all led by a few individuals and fueled by foreign, European capital.

Handing Off Heron Gate

A search of property records at the Ontario Land Registry office in downtown Ottawa reveals that Transglobe was in fact never the owner of the Heron Gate properties. Instead, the area was owned by a numerically-ordered series of companies called Kanco Heron Gate Ltd. Each company correlated with the City of Ottawa’s parcel division of the land.

Development of Heron Gate began in 1963 with the transfer of the parcels to Minto Construction Co. Limited. Minto – founded in 1955 as Mercury Homes by Roger Greenberg Sr. and his four sons, Irving, Lorry, Gilbert and Louis – has perhaps become the single most influential company in Ottawa in its ability to shape the urban landscape. It is Ottawa’s “biggest home builder” and has consistently embedded itself into municipal politics.

A few years after leaving Minto, Lorry Greenberg entered municipal politics, becoming a city councillor in 1968 and later mayor of Ottawa from 1975 to 1978. Irving, however, stayed with Minto and ran the company until he died in 1991. Gilbert’s son, Roger, then took over as CEO.

Following Irving’s death, Minto’s real estate portfolio was reevaluated and split amongst the heirs. Irving’s only son, Dan Greenberg, created a company called Otnim, which is Minto backwards.

Two of Minto’s largest holdings, and in fact two of the largest clusters of residential rentals in the country, Bayshore and Heron Gate, were transferred to Otnim in January 1997.

On February 1, 2007, Otnim transferred all seven parcels of land in Heron Gate – then with a population of around 4,000 people and comprising 1,750 units – to the Kanco Heron Gate companies. The deal was estimated to be worth between $180 and $200 million.

The German Connection

The reason why the Kanco Heron Gate companies were almost universally overlooked as the true owners of Heron Gate, except for a few financial reports, probably had to do with the fact that these companies existed for no clear reason. Transglobe was the brand, and Kanco Heron Gate was the tenebrous owner-entity that nobody needed to pay attention to.

Although the Kanco lineage remains opaque, mostly due to Canada’s slack corporate records and disclosure requirements, it can be traced back to a German real estate empire based around the Prajs & Drimmer Group, a Berlin-based parent corporation to 21 companies. This parent is led by siblings Sruel Prajs and Norma Drimmer.

Another Drimmer, Daniel, was born and raised in Berlin. He moved to Canada in the 1980s, where he graduated from the University of Western Ontario in 1993 with a B.A. in German. Two years out of his undergrad, he founded Transglobe Property Management.

The earliest identified ownership of property in Canada by Sruel Prajs and Norma Drimmer is in Mississauga in December 1994, through a company called Badenhurst Properties Limited, founded in 1980 (1994 was the same year Daniel Drimmer would birth Transglobe). Bradenhurst shared business addresses with Transglobe and recently had Daniel Drimmer listed as a vice-president.

As somebody who grew up in the area, our neighbourhood identity has never fully taken shape, owing to our development as a series of “ planned communities.” This is evident even in the spelling of Herongate/Heron Gate. It is clear now the massive monopolized rental community is known as “Heron Gate” (creating the sense of a gated community), while the neighbourhood at large is Herongate (as reflected in use by residents, OC Transpo and businesses).

Prajs and Norma Drimmer are also identified, in a document from February 1997, as owners of another commercial property in Mississauga, located at 6531−6559 Mississauga Road. In April 2006, the ownership of this property was transferred to a company called PD 6531−6559 Mississauga Ltd., with PD ostensibly substituting for the use of their names.

This commercial property had Transglobe’s brand pasted all over its signs in 2007. It was during this time that Transglobe aggressively acquired properties across Canada. Over four years, from 2006 to 2009, Transglobe became “the third largest multi residential [sic] owner in Canada,” according to Management Today.

Living conditions in buildings acquired by Transglobe quickly declined, with a noticeable amount of tenant organizing and news articles on poor maintenance creating an online trail of historical slumification. In 2012, a CBC Marketplace documentary focused squarely on Transglobe, labelling them “Canada’s worst landlord.”

Transglobe was acting as a nationwide slumlord, effectively driving tenants out of their rental units, overwhelming municipal bylaw enforcement departments and boosting profits through cost-saving measures such as unresponsiveness to maintenance requests and ignoring property standards requirements.

Transglobe went public with an IPO in May 2010, becoming a Real Estate Investment Trust, or REIT. Only two years later, the Transglobe brand ceased to exist.

Transglobe REIT privatized, distributing its properties to Starlight, which is also owned by Daniel Drimmer, CAPREIT, the Public Service Pension Investment Board (which is a crown corporation), and Timbercreek Asset Management. Commentators noted that Drimmer’s pivotal involvement in these deals, where he bought and sold between the various companies he owned, had strong undercurrents of conflicts of interest.

Despite Transglobe having turned into a national fiasco, the German Prajs and Drimmer, continued to machinate on the plan for Heron Gate through their connections with Timbercreek Asset Management. Their plan would soon have devastating consequences for those about to face displacement.

The name Kanco, combined with Prajs and Drimmer’s initials, was being used even before the Kanco Heron Gate companies were established. PD Kanco Limited Partnership was established in 2002 and shares the same business address with a number of other entities that revolve around another significant and mysterious company, Mustang Equities Inc.

The Mustang Gang

After Transglobe REIT went private, Timbercreek Asset Management took over all the Heron Gate properties through two deals, the first for $143,500,000 in the middle of 2012 and the second for $51,377,193 in September 2013.

However, once again Timbercreek was never the owner of the properties. The Heron Gate properties became, and remain, a co-ownership between Mustang Equities Inc., TC Core General Partnership Inc., and TC Core Limited Partnership.

In 2012, Ugo Bizzarri was the senior vice-president of Mustang Equities and vice-president of both TC Core GP and TC Core LP. He is also the co-founder of Timbercreek Asset Management, along with fellow University of Western Ontario alumnus Blair Tamblyn.

This just so happens to be the same school Daniel Drimmer went to. In fact,Bizzarri graduated the same year as Drimmer, in 1993, with an Honours Business Administration from the university’s Ivey Business School. Tamblyn graduated the next year, with a BA in History and Political Science. And the athletic teams at Western are the Mustangs.

Transglobe and Timbercreek have been working together for years and Drimmer is credited as being the driving force behind much of the joint activity. In reference to a 2008 “consortium” deal between the two corporations, Bizzarri spoke highly of Drimmer, telling Apartment Magazine, “If it wasn’t for him I don’t think the deal would have gotten done.”

In 2012, partnerships were formed between Mustang Equities and companies affiliated with Daniel Drimmer: Mustang-Master Limited Partnership, Mustang DDAP Partnership, and DD Mustang Holdings GP Ltd., with the DD ostensibly referring to Drimmer himself. These partnerships all have the same business address, on Bloor St. West in Toronto, as do many of Drimmer’s other companies.

Adding It All Up

The complex ownership of Heron Gate has served to simultaneously conceal and facilitate a coherent corporate strategy.

The plan for Heron Gate has long been to drive the properties into the ground, force out “legacy tenants” through wholesale demovictions, and maximize profits through increasing the density of units on each parcel – rather than abide by the city’s official guidelines on intensification, as Heron Gate already is one of the most densely populated neighbourhoods in Ottawa.

In a piece for Huffington Post, UN Special Rapporteur on Adequate Housing Leilani Farha explained that it is a global trend for investment firms to prey on low-income homes. She calls this “the financialization of housing, or the corporate capture of housing.”

Farha went to say that Timbercreek is “not your typical landlord” – they practice “unscrupulous demographic engineering in search of profits: replacing poor and vulnerable people with those who possess greater purchasing power.”

This model is not inevitable – or even the only one possible even within our current system.

Ottawa Community Housing (OCH) is currently tearing down 32 rowhomes in Rochester Heights, between Booth and Rochester streets near Little Italy. These homes were built in 1966, the same era as the Heron Gate development, and in a similar style.

OCH will replace these homes with a tower which will qualify for the ambitious environmental “passive house” standard – generating more energy than it uses – and will provide four times more social housing. In the meantime, residents have been placed in other OCH housing.

Heron Gate residents are not so lucky. In their case, the injection of foreign capital and influence has been coupled with the will of local politicians to disperse working class tenants – in a private meeting, Mayor Jim Watson expressed his desire to see the poor people of Heron Gate spread out across the city.

Heron Gate is ground zero for urban renewal of the 21st century, predicated not on explicit state tactics of displacement such as disruptive infrastructure, but on the global financialization and commodification of housing.

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